As hundreds of disgruntled travellers recount their summer holiday nightmares, a European Commission consultation document is raising hopes of a better deal for passengers.

The paper suggests extending existing compensation legislation to cover non-scheduled (charter) as well as scheduled flights, increasing the amount of compensation paid to inconvenienced passengers, and finding ways of making them more aware of their rights when they fall victim to overbooking.

Representatives of both travellers and airlines agree that overbooking is an increasing problem. BEUC, the European consumer lobby, warns that the liberalisation of the air transport market will lead to more cross-border complaints and welcomes moves to strengthen the laws.

It says that consumer bodies across Europe get many complaints from travellers who have received either inadequate compensation or none at all. It believes the complaints that reaches it are just the tip of the iceberg, with many people not realising when they are entitled to compensation.

BEUC cites one example of a passenger who first had to pay additional money in order not to miss the flight, was then unable to board the overbooked plane, was not given a later flight either that day or the next and eventually decided to travel home by train. The airline offered no assistance or compensation and only reimbursed the cost of the train ticket after the passenger complained.

The Commission has suggested that passengers should be given a brochure explaining their right to compensation if they are denied boarding.

But BEUC believes they should receive such information before they run into problems.

The Association of European Airlines (AEA) says that while it has no objections to giving passengers more information, it fears that extra legislation would penalise airlines who "behave well" and do nothing to prevent others breaking the rules.

Sefik Yuksel, general manager of trade affairs at the AEA, said his organisation was not happy with the Commission's calculations for increasing compensation to passengers denied boarding in order to take account of inflation.

"It has come out of the blue, without proper explanation," he said, adding that while overall inflation might have gone up, airlines' yields had gone down in recent years.

Officials in the Commission's Directorate-General for transport (DGVII) are also considering a study on the current contracts between airlines and passengers, with the aim of proposing legislation governing the small print of airline tickets. Many airlines do not, for example, accept liability for delays to scheduled times of 12 hours or more.